German adspend to fall

24 May 2012

BERLIN: Advertising expenditure levels are forecast to fall slightly in Germany this year, reflecting a variety of challenging trends facing the country.

ZAW, the trade body, revealed the total investment in advertising, including production costs and media revenues, rose 1.3% on an annual basis to €29.9bn in 2011, below the 2.4% growth logged during 2010.

Within this, pure adspend stood at €18.9bn, a 1% increase year on year, albeit still well short of the €20.8bn recorded in 2007.

Television enjoyed a 0.7% lift in ad sales to almost €4bn. Advertising minutage on TV fell by 6.4% to 1.8m in 2012, while the number of spots was down by 5.2% to 3.6m. This meant the typical spot was 30 seconds long, up from 23 seconds a decade ago.

Elsewhere, daily newspapers were off by 2.2% to €3.6bn. Direct mail registered a 0.1% gain to €3bn, but magazines saw a 0.7% loss, to €1.4bn.

Looking online, display delivered the most impressive performance among the media channels assessed, securing a 15% leap to €990m.

Based on a survey of its 40 member organisations, ZAW predicted the ad market as a whole would expand by 1%, to €30.2bn, in 2012. Media budgets, however, could decline by 0.5% to €18.8bn.

More specifically, 28% of the corporations polled expected to raise expenditure levels on ads this year, while 63% anticipated their outlay will be flat and 9% were seeking to cut back.
"The German advertising industry remains in a volatile situation, but we are hopeful about growth in the medium term," said Michael Kern, the president of ZAW.

Among the core issues brands must deal with, the study said, are financial instability in the eurozone, uneven consumer spending, which climbed 2.1% in 2011, and, further ahead, an ageing population.

The analysis also quoted the Gesamtverband Kommunikationsagenturen, the advertising industry association, which estimated agency revenues would rise 4.4% in 2012, behind the 6.4% posted in 2011.

However, margins should improve to 10.4% this year, some 1.4 percentage points better than the comparative rates from last year.

Data sourced from ZAW; additional content by Warc staff